Is an events center needed?

Published 4:13 pm, Tuesday, March 6, 2012

Katy city officials are exploring whether to build a new events center near Katy Mills mall, saying the city is losing out on opportunities to host various conventions, meetings and performances.

"Weddings, cultural events, musical events. We're missing out on all kinds of things that could be generated through that facility," said Mayor Don Elder, who adds that Katy's other large venue - the Katy Independent School District's Merrell Center - is booked "7 days a week, 24 hours a day."

Elder said the city has not purchased land for the project, but will be looking for a 14- to 15-acre tract "somewhere close to the mall."

"We haven't decided everything, but we do have some very definite objectives" Elder said. "It has definitely been established that there is a need."

At the Feb. 27 City Council meeting, council members approved the use of hotel occupancy taxes to pay for a $29,750 feasibility and economic impact study by TXP Inc. of Austin. City leaders also approved the use of hotel occupancy taxes to pay for a $9,110 marketing study and stakeholder interviews recently completed by TXP Inc.

Representatives from Katy Mills mall, the Katy Area Economic Development Council, area hotels and the medical and energy sectors were invited to lunch meetings on Nov. 15 and Jan. 11 to "assess the demand for an event center located within the city of Katy."

That study suggested that a 25,000- to 40,000-square-foot multi-use facility with a "robust telecommunications infrastructure and commercial kitchen capacity" would be "appropriate for Katy."

"Clearly, an events center has the potential to serve as an economic development driver that can further diversify the local economy," TXP vice president Travis James wrote in a Feb. 13 letter to the city.

Elder said the city has bond authority remaining from past bond elections, as well as healthy balances in both its reserve and HOT funds, which could be tapped for financing the events center. Hotel occupancy taxes are paid by guests at hotels inside city limits. Money from the HOT fund must be spent to promote the hotel industry and tourism in Katy.

The city takes in about $550,000 a year in HOT taxes from five hotels near the mall, said Finance Director Byron Hebert. The city's reserve fund stands at about $16 million.

Mayor Pro Tem Hank Schmidt said the HOT fund - a popular source of funding with other groups promoting tourism events in Katy - should be at least partially reserved for expenses in connection with the new convention center proposal.

Councilman Larry Gore agreed the city should let the fund "build up" for use on the project. "We're just in the early stages," he said. "We've got to look at the cost. We're not going to go build one just because we want one."

According to TXP, "Katy appears to be 'leaking' revenue and economic activity to other parts of the Houston regional economy because it lacks a suitable events venue. Representatives from the medical and energy sector reported holding meetings and events outside Katy because there is no suitable space available inside city limits, according to the report.

Elder noted that the PetroSkills training center near the mall brings thousands of engineers to the city each year for training. "Their people are asking for more cultural events," he said.

Hebert said the February meeting was the first time the council has had an opportunity to vote on exploring the events center idea. The first phase of the study was conducted with help from the Katy Area EDC, he said.

"Now we're at a point, we've done our homework and looked at it. Now we're ready to go to Phase Two, and we needed the council to say 'Yes, this is the direction we want to go in,' " Hebert said.

"This is something you don't want to just jump into," the finance director said. "We're talking about some serious money. We're going with caution; moving forward with small steps."

The second phase of study will include determining the size of the facility and possible locations, Hebert said, adding that there is land "on both sides of the freeway, and further out, too" that might be suitable.

If the city eventually decides to issue debt for the new center, there would be a public referendum on the idea, said Elder.